Engineering news
Rolls-Royce will focus on cutting costs and complexity, rather than selling off parts of its business, as it seeks to return to growth.
The company is looking to make annual cost savings of £150-200 million and in the past year has announced plans to cut 3,600 jobs from across the group, including 2,600 from its aerospace division and 1,000 from marine engines.
New chief executive Warren East told an analysts meeting yesterday: “We can do an awful lot of it with self-help, this isn't a matter of having to go out and spending billions of dollars on acquiring this business or that business, and selling other businesses.”
However, he added: “Some of the things that we're doing today, we might not be doing in 2020. If we remain uncompetitive in an unattractive market, then there is clearly a bit of portfolio optimisation to be done.”
East said more jobs will go as part of the review – expected to include senior management positions – but declined to give further details.
“This review of operations is an ongoing process. Some of it does involve people and jobs but I'm not going to talk about details because discussions are ongoing with our teams.
“This is about improving the effectiveness of the operation; it's not about reducing the number of engineers. We are an engineering company and the last thing I want is less engineers. What I want to do is make it easier for those engineers to do their jobs.”
As an example of too much complexity in the business, East said that the company's 27 key technologies – such as 3D printing and heat-resistant ceramics – did not all need the same amount of management, but that each was treated the same. They need to be condensed into about eight themes, with less people and less meetings, he added.
He also said the company could improve the way it uses digital technology when it comes to designing and developing aero engines.